Having looked back over the last couple of years, I realized that I have failed to provide enough updates on issues and cases making trade secrets | noncompete news. So, I am going to try to resume those efforts moving forward. Given my earlier IP Year in Review post, this post will be primarily update two of the topics there and provide a few other recent updates …

The DTSA. The Defend Trade Secrets Act, which would create a federal private right of action for the protection of trade secrets, has – with some amendments – been reported out of the Senate Judiciary Committee. Bloomberg BNA has a terrific summary here: Senate Judiciary Committee OKs Federal Trade Secret Bill. Testimony was taken back in December 2015, and is available here. Persons appearing to testify were: Karen Cochran, Chief Intellectual Property Counsel at E.I. DuPont de Nemours and Company, Tom Beall Vice President and Chief Intellectual Property Counsel at Corning Incorporated, James Pooley, a leading trade secrets expert, and Sharon Sandeen, Professor of Law at Hamline University School of Law. In addition, a letter was submitted in lieu of live testimony by a number of trade secrets practitioners (myself included) around the country. That letter is available here.

EU Trade Secrets Directive. The text of the Directive of the European Parliament and of the Council on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure is now available here.

New Federal Trade Secrets Prosecutions. Last week, the Pennsylvania U.S. Attorney’s Office brought charges against two GlaxoSmithKline scientists (Yu Xue and Lucy Xi) who allegedly stole trade secrets and emailed them to a Chinese startup called Renopharma. A summary of the case, as well as the backlash sparked by questions about racial profiling, is available here: U.S. charges drug researchers with sending trade secrets to China, but will case stand up? (The article quotes well-known trade secrets lawyer (and friend) Peter Toren.)

Discovery in Trade Secrets Cases – and Who to Sue. Companies seeking to protect their trade secrets from theft by wayward former employees frequently wrestle with the question of whether to sue just the employee or the new employer as well. A good reminder of one of the downsides of suing the new employer is demonstrated by a recent California Superior Court decision ordering Jawbone (who sued several former employees for and their new employer, FitBit) to turn over alleged trade secrets to Fitbit. A summary of the decision is here: Court Orders Jawbone to Give Fitbit Access to Confidential Information.

Noncompetes and Independent Contractors (Virginia). Another issue that arises every now and again is whether noncompetes can be used to bind independent contractors (as opposed to employees, franchisees, or other business partners). A recent federal court decision in Virginia answered the question in the affirmative. For a summary, see The Non-Compete Agreements Enforceable Against Independent Contractors.

Fiduciary Duties and Trade Secrets (California). Every now and again trade secrets and restrictive covenant cases involve not just conduct occurring around the employee’s departure, but long-term secret competition with the then employer. As also sometimes happens, an employee is laid off for unrelated reasons (sometimes a result of decreased sales caused by the employee’s secret competition, unknown to the employer). In Blackbird Technologies, Inc. v. Joshi, the Northern District of California was faced with just such an issue. In fact, the former employer found out about the secret competition as a consequence of a Youtube video posted by the former employee. For a summary, see The Duty of Loyalty Awakens.

FAR Regulation and Confidentiality. Apparently, the Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration have proposed an amendment to the Federal Acquisition Regulation that would “prohibit[] the use of funds, appropriated or otherwise made available, for a contract with an entity that requires employees or subcontractors to sign an internal confidentiality agreement that restricts such employees or subcontractors from lawfully reporting waste, fraud, or abuse to a designated Government representative authorized to receive such information.” For more, see Crowell & Moring‘s post, Proposed FAR Rule Targets Restrictive Confidentiality Agreements.

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